US Inflation Accelerates Amid Middle East Conflict
US inflation picked up pace in August as gas prices surged due to ongoing conflict in the Middle East, according to data released by the Labor Department. The consumer price index rose 3.4% last month compared to a year ago, matching July's increase.
The monthly rate of inflation quickened, with costs jumping 0.4% from July to August, up from an increase of just 0.1% in the previous month. Federal Reserve Chair Kevin Warsh and other officials have signaled that interest rates may remain on hold only if disinflation continues, which this report did not deliver.
Economists worry that more expensive fuel can spill into other parts of the economy, with prices for appliances, car repairs, and wireless phone services also jumping last month. The nationwide average cost of a gallon of gas leapt over 7% from a month ago to $4.30, leaving gas prices more than 27% higher than a year earlier.